Jennifer VanPelt is the assistant chief accountant at BIT Company, a manufacturer of computer
chips and cellular phones. The company presently has total sales of $20 million. It is the end of
the first quarter and Jennifer is hurriedly trying to prepare a trial balance so that quarterly
financial statements can be prepared and released to management and the regulatory agencies.
The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m.
deadline, Jennifer decides to force the debits and credits into balance by adding the amount of
the difference to the Equipment account. She chose Equipment because it is one of the larger
account balances; percentage-wise it will be the least misstated. Jennifer plugs the difference!
She believes that the difference is quite small and will not affect anyone\'s decisions. She wishes
that she had another few days to find the error but realizes that the financial statements are
already late.
Instructions 1. Who are the stakeholders in this situation?
2. What ethical issues are involved?
3. What are Jennifer\'s alternatives?
Solution
Answer:1 . Stakeholders are the people who are affected by the decision. That would be Jennifer
VanPelt, her manager, the company, the shareholders, and whoever is in charge of the
Equipment account.
Answer:2 The ethical issue is malfeasance. If Jennifer VanPelt is dishonest even though it was
probably someone else\'s mistake, she is getting herself wrapped up in a problem and making it
worse. Plugging numbers means not only is the mistake going to remain, but now the Equipment
account is messed up, too.
Answer:3 Jennifer\'s first alternative would be to go to the chief accountant and point out the
discrepancy. Since the credits exceed the debits, this shouldn\'t be a big deal, because there isn\'t
any money missing. Her second alternative would be to ask for an extension due to the
discrepancy. The third alternative would just be to submit the numbers, even though they don\'t
balance, and say that it should only take a few days to find the problem..
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Jennifer VanPelt is the assistant chief accountant at BIT Company, a.pdf
1. Jennifer VanPelt is the assistant chief accountant at BIT Company, a manufacturer of computer
chips and cellular phones. The company presently has total sales of $20 million. It is the end of
the first quarter and Jennifer is hurriedly trying to prepare a trial balance so that quarterly
financial statements can be prepared and released to management and the regulatory agencies.
The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m.
deadline, Jennifer decides to force the debits and credits into balance by adding the amount of
the difference to the Equipment account. She chose Equipment because it is one of the larger
account balances; percentage-wise it will be the least misstated. Jennifer plugs the difference!
She believes that the difference is quite small and will not affect anyone's decisions. She wishes
that she had another few days to find the error but realizes that the financial statements are
already late.
Instructions 1. Who are the stakeholders in this situation?
2. What ethical issues are involved?
3. What are Jennifer's alternatives?
Solution
Answer:1 . Stakeholders are the people who are affected by the decision. That would be Jennifer
VanPelt, her manager, the company, the shareholders, and whoever is in charge of the
Equipment account.
Answer:2 The ethical issue is malfeasance. If Jennifer VanPelt is dishonest even though it was
probably someone else's mistake, she is getting herself wrapped up in a problem and making it
worse. Plugging numbers means not only is the mistake going to remain, but now the Equipment
account is messed up, too.
Answer:3 Jennifer's first alternative would be to go to the chief accountant and point out the
discrepancy. Since the credits exceed the debits, this shouldn't be a big deal, because there isn't
any money missing. Her second alternative would be to ask for an extension due to the
discrepancy. The third alternative would just be to submit the numbers, even though they don't
balance, and say that it should only take a few days to find the problem.
